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STP.V down to 0.88. Picked up a few shares this morning. How low can it go?
Matt, I hold a few shares of PIK.V. Their market cap even with a billion shares is 630 million. They have ~$180 million in the bank and their capex needs for the existing 2 mines (if I remember correctly) are only about $40 million total.
So essentially you have production of 220,000 ounces of gold and 7 million pounds of copper in 2008. Using $3.50 copper and $900 gold and cash costs of $350, I come up with a cash flow of 14.5 cents per share. 7.5 to 10 times CF is $1.09 to $1.50. Add the $0.18 in cash per share they have on the books and you can come up with a range of $1.27 to $1.68. Stock is currently trading at $0.63.
Here are some additional points:
Goldcorp owns a 22% interest in them. Also, PIK.V has a seasoned management team that is looking to make acquisitions that are accretive. If this pans out the stock could be up significantly from here. If not, I am looking for at least something north of a buck.
Here is a link to an interesting article about PIK.V. GLTA.
http://www.goldeditor.com/articledisplay.php?id=2368
PIK.V reports eearnings. Gold producer projecting 210-220K oz in 2008 at cash cost of $345 to $365. 725 milion shares outstanding. They have about $200 million cash on hand.
http://biz.yahoo.com/cnw/080317/peak_gold_2007_result.html?.v=1
Peak Gold earns $14.6 million in Company's first year
Monday March 17, 9:00 am ET
(All figures are in US dollars unless stated otherwise)
VANCOUVER, March 17 /CNW/ - Peak Gold Ltd. (PIK:TSX-V) ("Peak Gold") today reported net earnings of $14.6 million or 3 cents per share for the thirteen months ended December 31, 2007. Production in 2007 from the date of acquisition of the Amapari and Peak mines was 149,830 ounces of gold at a total cash cost of $349 per ounce.
2007 Financial and Operational Highlights
The highlights presented below include the operating results of the
Amapari and Peak mines from the dates of their acquisition, which are April 3,
2007 and April 27, 2007, respectively.
- Net earnings of $14.6 million after charges of $6.2 million in
stock-based compensation
- Gold production of 149,830 ounces
- Total cash costs of $349 per ounce (net of by-product sales) (1)
- Consolidated operating cash flow of $26.6 million
- In April 2007, Peak Gold completed a Cdn$326.5 million financing of
435 million subscription receipts (each subscription receipt comprised
of one common share and one-half of one common share purchase warrant
of Peak Gold) at a price of Cdn$0.75 per subscription receipt. The
proceeds were used to partially finance the acquisition of the Amapari
and Peak mines for consideration of 155 million common shares with a
value of $100 million and $200 million in cash
- In November 2007, Peak Gold completed a financing of 147,723,334
special warrants for net proceeds to Peak Gold of Cdn$104.2 million.
On February 28, 2008, the special warrants were automatically
exercised into 147,723,334 common shares and 73,861,667 common share
purchase warrants of Peak Gold. The proceeds will be used for future
acquisitions of mineral properties and capital expenditures
Fourth Quarter Highlights
- Net earnings of $14.8 million after charges of $1.0 million in
stock-based compensation
- Gold production of 53,430 ounces
- Gold sales of 52,351 ounces
- Total cash costs of $398 per ounce (net of by-product sales) (1)
- Consolidated operating cash flow of $12.9 million
Robert Gallagher, Peak Gold President and CEO, made the following comments in relation to year-end and the fourth quarter results:
"Following the acquisition of the company's first operating assets in April, strong cash flow generation and improving operating costs have characterized Peak Gold's first year of operation. At the end of a year in which management and operating teams were strengthened and two financings were completed, the company is well positioned for future growth both internally and externally. With our operating assets continuing to generate strong cash flow to the company, full exposure to the gold market and cash and short term investments of $182 million, Peak Gold is well positioned for what should be an exciting 2008."
Operational Review
The full year operational highlights for the Amapari and Peak mines, which
include the period prior to their acquisition by Peak Gold, are as follows:
- Gold production for 2007 was 212,933 ounces compared to 206,800 ounces
in 2006
- Gold sales for 2007 were 214,398 ounces compared to 200,000 ounces in
2006
- Copper production for 2007 was 7.5 million pounds with sales of
7.3 million pounds compared to 6.5 million pounds produced and sold in
2006
- Total cash costs in 2007 were $364 per ounce compared to $355 per
ounce in 2006 (net of by-product sales) (1)
For the full year at Peak Mines in Australia, including the period prior to acquisition by Peak Gold, production was 116,533 ounces of gold and 7.5 million pounds of copper. Record annual mill throughput of 709,230 tonnes reflects consistent underground production and increased milling capacity. Production for the fourth quarter was 29,030 ounces of gold and 1.8 million pounds of copper. Total cash costs for the full year were $243 per ounce and for the quarter were $258 per ounce. The strengthening of the Australian dollar throughout the year negatively impacted total cash costs per ounce sold. Operating costs were reasonably consistent through the year with cost control remaining a key focus for management.
Production for the full year at the Amapari mine in Brazil, including the period prior to acquisition by Peak Gold, was 96,400 ounces, a 15% increase from 2006. Production for the fourth quarter was 24,400 ounces. Total cash costs for the year were $515 per ounce and for the quarter were $583 per ounce. Cash costs in 2007 were adversely affected by the strengthening of the Brazilian currency (real) related to the U.S. dollar. The Brazilian currency strengthened by approximately 16% during the year. Peak Gold continues to study the viability of alternative processes to improve the efficiency and costs of its operations at Amapari.
Gold and copper production in 2008 for both the Amapari and Peak mines are expected to be in line with 2007 production. Production in 2008 is expected to be 210,000 to 220,000 ounces at a cash cost of $345 to $365 per ounce. Cash costs in 2008 are expected to decline from 2007 levels as a result of cost saving programs implemented in 2007. A further weakening of the U.S. dollar will continue to have a negative impact on Peak Gold's cost structure. A significant increase in gold production is expected from 2009 onwards.
10 bagger I followed you into BBW.AX. Thanks for mentioning it.
MMR - Hit new 52 week high today of 18.40.
Near term catalysts for further upward price movement include
- Contnuing positive results at Flatrock. 3 successful wells. Flatrock has the potential to contain 1 trillion cu. ft of natural gas reserves. MMR has 25% working interest.
- Rentering its ultra deep well Blackbeard prospect. High probability of success.
- Over 80% average Production growth increase from 152 mmcfe/d in 2007 to 275 mmcfe/d in 2008.
- Company insiders have been buying aggressively
- Looking further ahead, MMR also has a license to develop the Main PAss Energy Hub, a natural gas storage facility for storing 28 bcf of gas in underground caverns.
You called it. Gold hits the four figure mark.
http://www.theglobeandmail.com/servlet/story/RTGAM.20080313.wpreciousmetals0313/BNStory/energy/home
Oops Just saw this was posted on another board on IH.
http://investorshub.advfn.com/boards/read_msg.asp?message_id=27357079
MAA.V Up 26 % today to $2.60
Maybe because of this
http://www.magindustries.com/detail.php?id=780
MAA has interests in metals, energy, minerals (potash) and forestry
MMR - Up over 6% today. Below is an article on MMR's projects.
http://www.nola.com/business/t-p/index.ssf?/base/money-1/120443972615610.xml&coll=1&thispage=1
Farm Equipment distributor TITN bucking todays sell off with a 3.4% gain. Bought some shares earlier today.
They generate revenues from sales of farm equipment, parts and service. They are projecting approx $0.80 in earnings for this coming year on revenues of $530 to $590 million. Current market cap is $240 million.
By VMC standardss they seem pretty fairly valured but I believe they will do much better than their stated earnings estimates.
MMR - Shares hit 18 today before backing off. Insiders see terrific value in the stock, Robert Day, a director has been buying stock like its going out of style. Mr. Day has bought $23 million worth of stock in the last 5 weeks even as MMR has been rising. Thats a good enough reason for me to continue to hold my long term options.
http://finance.yahoo.com/q/it?s=MMR
I agree they may not be a pure seed play but if this acquisition goes through they will be selling seeds in 42 countries.
http://in.reuters.com/article/asiaCompanyAndMarkets/idINWEL00061520080225
Also they have broad agricultural exposure. Let's see how earnings come through.
For seeds, take a look at PGG Wrightson (PGW.NZ) a New Zealand firm. Can be bought in the States as PGWFF.pk
I own a small position.
Here's their website: http://www.pggwrightson.co.nz/index.cfm
SRZ.TO - Logical1234, a poster on SH went to the SRZ shareholder meeting Thursday. Great news on the Ge and Ga credits when SRZ gets to full production.
I have taken the liberty of copying his post below. Also check out the SRZ presentation.
"My comments from the annual meeting:
Good presentation. It's on the company website:
http://www.sra-corporation.com/pdfs/SRA_AGM_FINAL.pdf
Estimated CFPS for 2008 = 0.64 (at zinc = $1.10 per lb.)
estimated CFPS for 2009 = 1.29 (at zinc = $1.10 per lb.)
estimated CFPS for 2010 = 1.41 (at zinc = $1.15 per lb.)
Excluding germanium and gallium.
They have 30M lbs hedged at $1.20.
The mine rate is planned to go up from 7,500 tpd in 2008 to 8,000 tpd in 2009. They are planning for higher rate in the future. The original mine rate was for 7,000 tpd, but they found that for an extra $20M of capex, they could increase the rate, so they did.
The recent private placements to raise money were for:
- They brought some capex spending forward.
- Some inflation of costs.
- The lower zinc price.
For the germanium and gallium:
- Lab tests for their process show recovery rates as Ge=85%, and Ga=70%. They will be starting an engineering and scoping study soon.
- They have several proposals from companies that want to buy the raw tailings so they can extract the Ge and Ga. This would be a fall-back solution if SRA doesn't want to process it themselves.
- They could produce 30,000 - 35,000 kg/yr of each of Ge & Ga.
- Ge sells for $1100 / kg
- Ga sells for $550 / kg
- I think he said that gallium is also used in solar panels?"
Bobwins Re NRDS.PK, there's been some weird trading in the stock the past five or six days with significant weakness in the morning and recovery by the end of the day. Wonder if today's news had anything to do with that.
SRZ.TO news - BTW, Anyone going to the shareholder meeting tomorrow? Should be interesting.
SRA begins Crushing and Hoisting at Gordonsville Mine in Anticipation of Mill Start-up
Wednesday February 20, 8:48 am ET
TORONTO, ONTARIO--(MARKET WIRE)--Feb 20, 2008 -- Strategic Resource Acquisition Corporation ("SRA" or the "Company") is pleased to announce that the primary crusher and production hoist are now fully commissioned. Hoisting commenced yesterday from an underground stockpile inventory of approximately 80,000 tons.
Systematic commissioning of the various surface and mill components by onsite commissioning teams is nearing completion. The secondary crushing circuit has completed commissioning and will begin crushing rock, while plant air, seal water and process water systems have been tested and are ready to receive ore.
The balance of the plant systems are progressing systematically through commissioning. The rod mill liners are installed, lube systems complete and review of the rod mill installation is being finalized. Initial run with rock into the mill will begin by the end of this week.
For calendar 2008, production from all three mines - Gordonsville, Cumberland and Elmwood - is expected to be 110 to 120 million pounds of payable zinc, in concentrate with a full sustainable life of mine production level of 7,500 tons per day achievable by mid-year.
About SRA
SRA Corporation is focused on the development of the MTM zinc project in the State of Tennessee. The MTM mining and milling complex is located approximately 80 kms east of Nashville with excellent infrastructure including roads, water, power, major airport and access to a well-trained workforce. MTM will produce one of the highest quality zinc concentrates in the world and efforts are underway to establish recovery methods for the valuable germanium and gallium contained in the concentrate. Once in full production, the Gordonsville Complex at MTM is expected to be the largest zinc producer and domestic source of germanium and gallium in the continental USA.
The Company also plans to explore and develop additional properties and redeploy cash flow to pursue a strategy of accretive acquisitions.
These ETF's will hopefully just keep chugging along through the market uncertainty.
http://seekingalpha.com/article/64802-which-of-the-6-agriculture-etfs-is-best
The Wall Street Journal has a great article out (sub. req.) regarding the recent run up in the prices of agricultural commodities. It makes the point that as the US and other countries search for alternative fuel sources, one of the areas it turns to is the grains. Corn, soybeans, and wheat have all hit new historic highs recently and sugar is at a 52-week high.
In essence we are using our sources of food as a means to fuel our cars and generate energy. There is only so much land that can be used for farming and with the growing demand for food from emerging countries such as China, the supply will not be ample. Then there are wildcards such as weather that can greatly affect the supply. Recent issues in Australia and the Ukraine have hurt the supply of wheat, pushing the global stocks to multi-decade lows and sent the price soaring as demand continues to surge.
To play the agricultural boom, investors could either buy directly into the futures or turn to a handful of ETFs that are now on the market. There are 6 ETFs that will give investors exposure to the agriculture futures.
PowerShares DB Agriculture ETF (DBA) – The ETF has been around a little over one year, the most of any of the ETFs on this list. Four equally weighted commodities make up the base allocation for DBA: corn, soybeans, sugar, and wheat. The expense ratio for all ETFs on the list is 0.75%. DBA is the most liquid of the ETFs by far, but the concentration in only 4 commodities does put the risk at above average.
iPath Dow Jones AIG-Agriculture ETN (JJA) – The ETN is a little more diverse than DBA, with 7 commodities. The largest allocation is in soybeans (31%), followed by wheat (20%), and corn (16%). Since it began trading in October 2007 the ETN is up 28% versus a gain of 36% for DBA. The liquidity is more than enough for investors and the only issue is 1/3 of the ETN in one commodity, soybeans.
ELEMENTS Linked to the Rogers International Commodity Index – Agriculture ETN (RJA) – For starters, do you think they could have come up with a longer name for their ETN? Second, keep in mind this is an exchange-traded note [ETN], versus and ETF. Most investors will never know the difference and I will not go into the intricacies in this article. RJA is the most diverse of the group, with 20 different agriculture commodities represented. The top holdings include: wheat (20%), corn (14%), cotton (12%), and soybeans (9%). With more diversity among commodities, the upside potential will be less than the previous two ETFs, but the downside will also be less. For example, the ETF is up only 20% in the same time frame as the other two above, thus lagging. During the one-week pullback in mid January of the agriculture ETFs, DBA lost 9%, JJA 7%, and RJA was only down 5%. This ETF is perfect for the more conservative commodity investor.
iPath Dow Jones AIG-Grains ETN (JJG) – The grains are considered a sub-sector to the agriculture and consequently there are not nearly as many to choose from when building a grains ETN. JJG is composed of only 3 commodities: soybeans (46%), Wheat (30%), and corn (24%). Recently it has been okay to be concentrated on three very hot commodities; since late October the ETN is up 31%. The two problems with JJG are the low average daily volume resulting in large spreads and the risk of being over concentrated.
ELEMENTS Linked to the MLCX Grains Index ETF (GRU) – The newly introduced ETN from the company that brought you RJA began trading this week and has yet to bring in the volume needed to get rolling. That being said, it is an alternative to JJG because it offers a similar strategy. The major difference is where the money is allocated. The top holdings are: wheat (47%), corn (36%), soy meal (10%), and soy beans (8%). If wheat is your game, go with GRU. If soybeans get you more excited, JJG is there for you.
ELEMENTS Linked to the MLCX Biofuels Index ETF (FUE) – This ETN may not sound like it should be included in this list, but after I share with you the allocation you will understand. The top holdings are: soybeans (32%), sugar (25%), corn (21%), and soy bean oil (13%). FUE is very new as well and has yet to attract the volume and therefore spreads could be an issue. Other than that, the one issue I have with FUE is the absence of wheat. Because wheat is not considered to be used in biofuels it is not included. I want to have exposure to wheat, therefore choose one of the other five candidates.
MMR - 14.67 up 0.62 (4.67%) on News
McMoRan Exploration Co. Announces Second Successful Well at Flatrock Field
Monday January 14, 9:40 am ET
NEW ORLEANS--(BUSINESS WIRE)--McMoRan Exploration Co. (NYSE: MMR - News) today announced its second successful well at the Flatrock field located on OCS 310 at South Marsh Island Block 212 in ten feet of water.
ADVERTISEMENT
The Flatrock No. 2 (“B” location) delineation well, which commenced drilling on October 7, 2007, is located approximately one mile northwest of the Flatrock discovery well. The well has been drilled to 15,400 feet and log-while-drilling tools have indicated three resistive zones in the Rob-L section approximating 198 net feet over a combined approximate 315 foot gross interval. These zones will be evaluated with wireline logs. The well will be deepened to a proposed total depth of 18,100 feet to evaluate additional targets in the Rob-L and Operc sections.
McMoRan’s Co-Chairmen, James R. Moffett and Richard C. Adkerson, said, “We are pleased with the results to date from the Flatrock No. 2 delineation well, which confirm the potential for significant hydrocarbons in this exciting area. We look forward to commencing production from the Flatrock No. 1 discovery well in the weeks ahead and to testing additional objectives on this large acreage position.”
McMoRan also today updated the status of the Flatrock No. 3 (“D” location) delineation well. The No. 3 well commenced drilling on November 5, 2008 and has been drilled to 14,800 feet. The well has a proposed total depth of 18,800 feet and is targeting Rob-L and Operc sands approximately 3,000 feet south of the discovery well.
As previously reported, the Flatrock No. 1 (“A” location) discovery well was drilled to a total depth of 18,400 feet in August 2007. Wireline and log-while-drilling porosity logs confirmed that the well encountered eight zones totaling 260 net feet of hydrocarbon bearing sands over a combined 637 foot gross interval, including five zones in the Rob-L section and three zones in the Operc section. A production test was performed in October 2007 in the Operc section and indicated a gross flow rate of approximately 71 million cubic feet of natural gas per day (MMcf/d) and 739 barrels of condensate, approximately 14 MMcfe/d net to McMoRan. First production from the discovery well is expected to commence in the first quarter of 2008 using the Tiger Shoal facilities in the immediate area.
McMoRan controls approximately 150,000 gross acres in the Tiger Shoal/Mound Point area (OCS 310/Louisiana State Lease 340). McMoRan has made several discoveries in this important area, including Flatrock, Hurricane, Hurricane Deep, JB Mountain, and Mound Point. McMoRan has multiple additional exploration opportunities with significant potential on this large acreage position. McMoRan has a 25.0 percent working interest and an 18.8 percent net revenue interest in the Flatrock field. Plains Exploration & Production Company (NYSE: PXP - News) has a 30.0 percent working interest.
McMoRan Exploration Co. is an independent public company engaged in the exploration, development and production of oil and natural gas offshore in the Gulf of Mexico and onshore in the Gulf Coast area. McMoRan is also pursuing plans for the development of the MPEH™ which will be used for the receipt and processing of liquefied natural gas and the storage and distribution of natural gas. Additional information about McMoRan and the MPEH™ project is available on its internet website “www.mcmoran.com” and at “www.mpeh.com”.
PCE.v closed today at $0.38 (+0.05), up 15%. This stock has lots of potential.
PACE is a Canadian company exploring and developing coalbed methane resources in China. They hold 2 Production Sharing Contracts in China in traditional coal producing areas with 2 more . One of these concessions has an estimated potential gas resource of 11.2 Tcf.
In addition to their highly prospective concessions, the kicker for PCE.v is their alliance with Australia’s Mitchell Drilling. Their 50/50 JV has exclusive license to use Mitchell Drilling’s Dymaxion proprietary drilling platform in China. The drilling technology supposedly has proven advantages over vertical production wells completed by hydrofracturing or cavitation in degassing medium depth coal seams. China's CBM industry is still in its infancy and over 30 Production sharing contracts have been signed with several foreign companies. So lots of exploration wells being drilled.
This combined with China's hunger for increasing their percentage of clean energy (such as CBM) point to the stars being aligned for CBM and PCE.v in China in 2008.
OPBL.ob - $0.12, up almost 100% in the last 5 trading days. Finished in the green today.
Rogue, I agree with you on the Chinese currency. I bought some several weeks ago through Everbank but they don't give you any interest.
Do you know any bank where you can buy an RMB CD?
Bought some shares today at 8.73. Compelling value. Should see rental income start to burgeon in the 1st quarter.
Bought some shares today at 8.73. Compelling value. Should see rental income start to burgeon in the 1st quarter.
MMR - Stock has steadily increased about 12% over the last month or so. Insiders have bought 1.3 million shares since November. Investors are awaiting Flatrock news which is expected to be released soon.
Check out their presentation here:
http://www.mcmoran.com/presentatn/2007/Merrill%20Lynch.pdf
Littlefish - The liabilities still exist. I was only recommending it as a purely speculative trade considering how far they have fallen.
They have brought on a couple of new directors onto their board who have experience in rebuilding companies. See their 8-k
http://secfilings.nasdaq.com/filingFrameset.asp?FileName=0000932440%2D07%2D000749%2Etxt&FilePath=%5C2007%5C11%5C30%5C&CoName=OPTIONABLE+INC&FormType=8%2DK&RcvdDate=11%2F30%2F2007&pdf=
OPBL.ob - closed at 0.08 up 25% - Previous scam/fallen angel stock showing signs of life. According to Yahoo, OPBL.ob has 0.21 in cash.
Maybe good for a speculative trade after all that tax loss selling.
Take a look at American Vanguard (AVD). Picked up a few shares today at 16.97. They are projecting $1 of earnings next year.
SROE.ob - Closed at 3. Stock was at 0.90 cents on Dec 5th. Great pick Kik.
SROE
Good trade 10bagger.
Its up to 2.01 today but looks like there's another 888 trade. You again?
SROE Up 52% to $1.88 on low volume. Thanks KIK.
It may not hold the gains today but that float seems extremely tight. Its gone up from $0.90 to $1.88 on very little volume. Just imagine if we get some volume.
Two China coal bed methane plays that I just initiated positions in are PCE.v/PCEEF.ob and FEEC.ob. Both stocks have been beaten down and IMHO have explosive (pun intended) upside potential. They play into the theme of clean energy and the energy hungry Chinese economy.
Here's a profile on PCE.v:
http://www.proactiveinvestors.com/articles/article.asp?PCE3
FEEC.ob has some sweet concessions, the best of which is a 1.3-million-acre concession in Chinas coal rich Shanxi and Yunnan provinces. The properties have potential recoverable CBM resource of between 9.2 and 12.5 trillion cubic feet. They are situated near two major national pipelines running to both Beijing and Shanghai.
Check them out. I'd be curious to hear what other board contributors have to say about these two companies.
MMR - Here's the Barron's excerpt referenced in my earlier post. Also mentioned is the heavy insider buying.
IT'S EASY TO SEE WHY McMoRan Exploration (MMR) gets dissed. The small New Orleans company toils in the hit-and-miss field of exploration and production. It took on that which investors fear today -- debt -- to finance deals, and high exploration costs led it recently to report its fifth consecutive quarterly loss. Shares are off 32% since July and slumping at a four-year low.
So why have insiders just bought millions in stock? Hoping to find deep gas reserves under the shallow waters in the Gulf of Mexico, McMoRan has been drilling at the Flat-rock basin (in which it holds a 19% stake), and reporting hopeful "flow rates" from wells there. Production is slated to begin at year end, and until then it's difficult -- risky, even -- to handicap the wells' potential. Meanwhile, the company's co-chairman, who is also its lead geologist, has been buying McMoran shares enthusiastically, which offers at least a vote of confidence.
That's not all. A recent round of stock sales has helped McMoRan pay down bridge loans. Brad Ruderman of Ruderman Capital likes management's track record in drilling production, and the company's "prodigious cash generation," which is projected to top $300 million next year for a free-cash-flow yield of nearly 30%.
The uncertainty produces disparity even among bullish analysts. For instance, the Street consensus is for McMoRan to earn just 38 cents a share in 2008. That suggests the shares, at 11.70, trade at a whopping 31 times earnings. But that hefty multiple falls to a mere 12 times if one accepts JPMorgan's '08 forecast of 97 cents.
"We think the street has not yet acknowledged the size of McMoRan's Flatrock discovery, nor the implications for the rest of its inventory," argues JPMorgan analyst Brian Kuzma, who has an 18 price target on the stock. He calls the pullback "an opportunity for investors willing to learn McMoRan's complicated story."
McMoRan shares could touch $18 -Barron's
Sun Dec 2, 2007 6:56pm EST NEW YORK (Reuters) - Oil and gas explorer McMoRan Exploration (MMR.N: Quote, Profile, Research) shares could rise to $18, according to a report in the December 3 edition of Barron's.
"We think the Street has not yet acknowledged the size of McMoRan's Flatrock discovery, nor the implications for the rest of its inventory," said JPMorgan analyst Brian Kuzma, in the article.
Shares of the company closed at $11.76 Friday on the New York Stock Exchange
MMR - Stock trading near its 52 week low. Big purchases by insiders lately.
http://finance.yahoo.com/q/it?s=MMR
ATP Oil to Sell 5M Shares for $47 Apiece
Thursday November 15, 12:23 pm ET
ATP Oil & Gas Prices 5M Share Offer at $47 Apiece, Proceeds to Fund Drilling and Development
HOUSTON (AP) -- ATP Oil & Gas Corp. said Thursday it has priced a public offering of 5 million shares at $47 apiece.
ATP intends to use proceeds for general corporate purposes and to fund drilling and development, including potential expansion at three of its sites. It expects the offering to close on Nov. 20.
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The company is required to remit about $56 million of proceeds to its lenders to prepay term loans under a credit agreement. Each lender has the right to reject its share of the mandatory prepayment, and any declined proceeds must then be reoffered to those lenders that have accepted their share. ATP may retain any remaining declined proceeds.
Chairman and President T. Paul Bulmahn granted the underwriters a 30-day option to purchase up to an additional 750,000 shares at the public offering price, less the underwriting discount to cover overallotments, if any.
Assuming the underwriters exercise the option in full, Bulmahn will own about 17.6 percent of ATP stock after the offering. ATP will not receive any proceeds from Bulmahn's sale of shares.
Howard Weil Inc. and Johnson Rice & Co. LLC acted as joint book-running managers for the offering.
ATP shares fell $4.76, or 9.1 percent, to $47.53 in midday trading.
Acehigh I agree, OK.v looks real good. I recently initiated a position.
The stock has already run up a bit but there's a lot more to go. Orko is an exploration company with 3 projects in Mexico. They have kept increasing the size of their resource and have hinted strongly in their corporate presentation (below) that the next resource estimate due out first quarter next year is going to be substantially more than their current 43-101 compliant 73 million ounces of Ag equivalent estimate. They have made it clear that they are an exploration company and that they will define the resource and sell. They have 3 drills turning 24/7 and are fully funded for the next year of operations. GoldCorp is a 3% shareholder in the company. Orko's management has done the same thing before successfully i.e. defined a resource and sold successfully.
Check out their latest October 17, 2007 presentation on their website at http://www.orkosilver.com/s/home.asp.
Bobwins, thanks for the update.
Jim Rogers continues to be bullish about commodities, agriculture and the yuan.
http://www.bloomberg.com/apps/news?pid=20601087&sid=amQBwDBSDvBE&refer=worldwide
Jim Rogers Shifts Assets Out of Dollar to Buy Yuan (Update1)
By Marcel van de Hoef and Danielle Rossingh
Oct. 24 (Bloomberg) -- Jim Rogers, chairman of Beeland Interests Inc., said he is shifting all his assets out of the dollar and buying Chinese yuan because the Federal Reserve has eroded the value of the U.S. currency.
``I'm in the process of -- I hope in the next few months -- getting all of my assets out of U.S. dollars,'' said Rogers, 65, who correctly predicted the commodities rally in 1999. ``I'm that pessimistic about what's happening in the U.S.''
Rogers, delivering a presentation late yesterday at an investors' meeting organized by ABN Amro Markets in Amsterdam, said he expects the Chinese currency to quadruple in the next decade and that he is holding on to commodities such as platinum, gold, silver and palladium.
The dollar has dropped against all the 16 most actively traded currencies except the Mexican peso this year as slowing growth and the first interest-rate reduction since 2003 last month dimmed the allure of dollar-denominated assets.
Since the Fed lowered U.S. interest rates on Sept. 18, the first cut in four years, the dollar has fallen 2.8 percent against the euro and touched a record low yesterday. Gold rose to a 27-year high and platinum jumped to a record.
``It's the official policy of the central bank and the U.S. to debase the currency,'' said Rogers, a former partner of George Soros.
Reserve Currency
``The U.S. dollar is and has been the world's reserve currency, the world's medium of exchange,'' he said. ``That's in the process of changing. The pound sterling, which used to be the world's reserve currency, lost 80 percent of its value, top to bottom, as it went through the whole period of losing its status as the world's reserve currency.''
The Chinese currency, known as the renminbi, or yuan, is ``the best currency to buy right now,'' Rogers said. ``I don't see how one can really lose on the renminbi in the next decade or so. It's gotta go. It's gotta triple. It's gotta quadruple.''
The yuan strengthened past 7.5 to the dollar today for the first since the central bank ended a fixed exchange rate in July 2005. The currency has gained 10.5 percent since the dollar link was abandoned.
China, growing faster than any other major economy, is ``going to be the most important country in the 21st century,'' he said. China's gross domestic product expanded 11.9 percent in the second quarter, and analysts surveyed by Bloomberg estimate the economy grew by 11.5 percent in the three months to Sept. 30.
Rogers also is buying Swiss francs and Japanese yen, which he said have been ``pounded down'' because of the so-called carry trades.
Unwinding Carry Trades
In the carry trade, investors borrow in countries with low interest rates, such as Japan, and invest the proceeds where rates are higher. Japan's benchmark overnight lending rate is 0.5 percent, compared with 6.5 percent in Australia and 8.25 percent in New Zealand.
The carry trades in yen and francs will ``unwind someday,'' which will send the currencies ``straight up,'' Rogers said. ``I'm buying the yen.''
The bull markets in bonds and stocks are ``over,'' he said. ``Bonds will be a terrible place to be for many years and will in fact be going down for many years.''
Rogers said he remains bullish on commodities because ``that's where the big fortunes are going to be made in the world in the next five, or 10 or 15 years. The current bull market is going to last until sometime between 2014 and 2022.''
Commodity Prices
Commodity prices have surged as demand for raw materials, especially from China, rose faster than producers were able to increase output. Agricultural prices have led recent gains, including a record high for wheat last month and a three-year high in soybeans.
``The number of hectares devoted to wheat farming has been declining for 30 years, the inventory levels of food are at the lowest level since 1972,'' Rogers said. ``Suppose we start having droughts again. God knows how high the price of agriculture is going to go, so that's where I'm putting more of my money now than in other things.''
He added, ``I think I'm going to make more money in agriculture than I make in precious metals.''
Platinum, gold, silver and palladium will ``be much, much higher during the course of the bull market,'' he said.
Looks like the author of that article is our very own MontyHigh. He linked to his blog post yesterday. Congratulations!!!
This is not a junior miner but how often do you hear of a TRILLION dollar resource. They have 17 rigs drilling continuously and cannot delineate the extent. Talk about a monster!!!!
BHP values Olympic Dam at $1 trillion
Andrew Trounson | September 26, 2007
BHP Billiton has almost doubled the value of ore in the ground at its Olympic Dam mine in South Australia to more than $1 trillion.
Flash furnace in action at Olympic Dam. Picture: Colin Murty
The increase is set to support mining at Olympic Dam and the tiny township of Roxby Downs for perhaps a hundred years or more, and is likely to encourage BHP's in-coming boss Marius Kloppers to as much as double the size of a planned expansion.
But BHP Billiton is facing a huge construction bill that according to some analysts could blow out to be as high as $US15 billion ($17.2 billion), including major water and power investments.
It is speculated the expanding size of the ore body and escalating construction costs for mining projects globally will encourage BHP to maximize the size of any expansion.
BHP had originally been considering doubling copper production at the mine, but Merrill Lynch is tipping a more than quadrupling in production to 1 million tonnes a year of copper.
Such an expansion would also yield 30,000 tonnes a year of uranium oxide and 500,000 ounces of gold. Merrill Lynch has forecast the cost of such an expansion at $US10 billion to $US15 billion.
But BHP is treading carefully as it assesses the different development options, and first production from any expansion isn't expected until 2013 at the earliest.
A pre-feasibility study on the project isn't expected to be completed until mid-2008.
BHP has spent about $US50 million drilling the ore body and today increased its estimate of mineral-bearing ore resources to 7.7 billion tonnes from 4.4 billion tonnes.
South Australian premier Mike Rann said the increased resource figures were “about the best news economically that this state has ever received”.
“About 17 rigs have been drilling continuously and still cannot find the extent of the resource - they can't find the perimeters, they can't find an end to the depth of it,” Mr Rann said.
In August Mr Kloppers said Olympic Dam could turnout to be the world's second biggest base metal discovery in the world behind the Norilsk nickel discover in Russia.
Contained copper resources have jumped by 38 per cent to 67 million tonnes, while contained uranium is up 27 per cent to 2.2 million tonnes. Contained gold resources have risen 11 per cent to about 11 per cent to almost 82 million ounces.
The deposit is the world's single largest uranium deposit and among the top five gold deposits. But copper is the main source of earnings at Olympic Dam, followed by uranium.